Texas Register Preamble

The Texas Real Estate Commission (TREC) adopts new 22 TAC §535.154, Registration and Use of Alternate, Team and Assumed Business Names Used in Advertisements and new 22 TAC §535.155, Advertisements, in Chapter 535, General Provisions, with changes, as published in the August 25, 2017, issue of the Texas Register (42 TexReg 4236).

The new rules align the rules with statutory changes adopted in SB 2212 by the 85th Legislature effective September 1, 2017 and implement changes to the rules recommended by the Commission's Executive Committee following over a year of study and input from stakeholders. The rule was split into two rules to separate out name and registration of name requirements from advertising requirements. Most of the new requirements involve changes to how team names are defined, registered and used. New statutory provisions and a consensus by stakeholders that team names presently cause most of the consumer confusion in advertisements drove these changes. Much of the new rules contains provisions that are similar or identical to the current rule but have been rewritten for clarity. Additionally, new definitions were added, the requirement for notifying the Commission of the use of an alternate name, assumed business name or team name was amended to require registration of the names with the Commission prior to their use, and the current safe harbor policy regarding the size of the broker's name in advertisement was put into the rule.

Twenty-two comments were received on the proposal as published. One was from a trade association and five other commenters supported their remarks. The trade association was generally in support of the new rules with the exception of subsections (d)(4) and (d)(7). Commission staff after reviewing the comments and consulting with the association recommended revisions that the association endorses. Staff also recommended additional language to further distinguish the definitions of a broker's assumed business name and a team name. Of the remaining commenters, seven were opposed to the requirements for team names and nine were generally in support.

The Commission recognizes that some license holders on teams will need to change their signage under the new rules. To ameliorate this expense, the Commission has extended the effective date of the rule until May 15, 2018 to allow those license holders to spread out the cost of new signage over time.

The revisions to the rules as adopted do not change the nature or scope so much that they could be deemed different rules. The rules as adopted do not affect individuals other than those contemplated by the rules as proposed. The rules as adopted do not impose more onerous requirements than the proposed rules.

The reasoned justification for the proposal is increased consumer protection by setting out requirements that will make it clear to the public who is responsible for the operation of the brokerage when they view license holders' advertisements.

The new rules are adopted under Texas Occupations Code, §1101.151, which authorizes the Texas Real Estate Commission to adopt and enforce rules necessary to administer Chapters 1101 and 1102; and to establish standards of conduct and ethics for its license holders to fulfill the purposes of Chapters 1101 and 1102 and ensure compliance with Chapters 1101 and 1102.

The statutes affected by this adoption are Texas Occupations Code, Chapter 1101. No other statute, code or article is affected by the amendments.

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